Despite general gains throughout the day, the FTSE 100 was down 1.32% (79.73 points) by the end of trading as the markets saw profit selling and taking after gains over recent months.
Banks tended to especially lose out after performing well over recent weeks, with Barclays down 3.32%, Lloyds down 2.36%, RBS down 1.28%, and HSBC down 0.73%.
Other losers among the big companies included Imperial Tobacco Group (-5.04%), Taylor Wimpey plc (-4.59%), British Airways (-4.20%), Petrofac (-4.09%) and Aggreko (-3.83%).
Gainers were led by clothing retailer ASOS (8.58%), William Hill (6.96%), Tate Lyle (4.93%), Pearson (4.47%), and African Minerals (3.19%).
NOTES:
There was no big overall trend by sector, with losses and gains throughout, though the losses on banks suggest the realities of the European sovereign debt crisis are coming back to haunt.
Generally, though, the picture was one of overall correction and profit taking after Decembers strong showing.
While some companies did manage a strong showing, the FTSE 100 remained below the 6,000 point mark despite strong showing through much of the day, suggesting that it is unlikely to be able to maintain a fundamental around that mark.
The suggestion is that the bull rally weve seen since March 2009 may be running out of steam, certainly something a number of analysts have predicted for the FTSE reaching 6,000 points.
With appalling fundamentals underlining much of the supposed economic recovery in the West, and euphoria about companies beating their very pessimistic earnings outlooks through 2010, the suggestion is that we may be looking at the best as being behind us for some time.
While no doubt the FTSE 100 will try again to touch the 6,000 mark in the coming days, even weeks, a correction has been long over due, and the danger is that we are now seeing bulls become bears after making healthy profits over the past 12-18 months.
Personally, Im remaining in cash for the time being, and while Ive enjoyed playing volatile stocks such as RBS recently, Ill be looking to trade in stronger banks such as Barclays, if we see that company fall under 280 points. If nothing else, dividends will help protect against any further short-term falls.
In the meantime, outlook is: a time for caution.
